Economy of Cape Verde
Encyclopedia
Cape Verde
is a small archipelagic
nation that lacks resources and has experienced severe droughts. Agriculture is made difficult by lack of rain and is restricted to only four islands for most of the year. Most of the nation's GDP comes from the service industry. Cape Verde's economy has been steadily growing since the late 1990s, and it is now officially considered a country of average development, being only the second country to have achieved such transition, after Botswana
in 1994. Cape Verde has significant cooperation with Portugal at every level of the economy, which has led it to link its currency
(the Cape Verdean escudo) first to the Portuguese escudo
and, in 1999, to the euro
.
.jpg)
.jpg)
.jpg)
Cape Verde
's low per capita GDP
reflects a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought
. During periods of normal rainfall, only 4 of 10 islands (Santiago, Santo Antão, Fogo, and Brava) support significant agricultural production.
About 90% of food must be imported. Cape Verde annually runs a high trade deficit, financed by foreign aid and remittances from emigrants; remittances constitute a supplement to GDP of more than 20%. Economic reforms, launched by the new democratic government in 1991, are aimed at developing the private sector and attracting foreign investment to diversify the economy. Since 1991, the policies the government has pursued include an open welcome to foreign investors and a far-reaching privatization program.
Fish and shellfish are plentiful, and small quantities are exported. Cape Verde has cold storage and freezing facilities as well as fish processing plants in Mindelo
, Praia
, and on Sal
. However, the fishing potential, mostly lobster
and tuna
, is not fully exploited.
The economy is service-oriented, with commerce, transport, and public services accounting for almost 70% of GDP. Although nearly 38% of the population lives in rural areas, the share of agriculture
in GDP in 2010 was only 9.2% (up from 8.9% in 1995); of the 1998 total, fishing
accounts for 1.5%.
The Cape Verdean government established the top priorities for development as the promotion of a market economy and of the private sector; the development of tourism, light manufacturing industries, and fisheries; and the development of transport, communications, and energy facilities. In 1994-95 Cape Verde received a total of about U.S.$50 million in foreign investments, of which 50% was in industry, 19% in tourism, and 31% in fisheries and services. Prospects for 2000 depend heavily on the maintenance of aid flows, remittances, and the momentum of the government's development program.
on the islands of Boa Vista
, Sal
, and São Vicente
; gypsum
on the island of Maio
; limestone
on the islands of Boa Vista, Sal, and Santo Antão; pozzolana
on the island of Santo Antão; and salt
on the islands of Maio and Sal. Cape Verde was not a natural gas or petroleum producer as of 2007.
, airports are located on all of the inhabited islands. The archipelago has 3,050 kilometers (1,830 mi.) of roads, of which 1,010 kilometers (606 mi.) are paved. The new Praia International Airport
is currently operative.
.
In 2007 the United Nations graduated Cape Verde from the category of Least Developed Countries
, only the second time this has happened to a country.
On December 18, 2007, the General Council of the World Trade Organization
approved a package for the accession of Cape Verde to the WTO. Accession was effective on July 23, 2008, 30 days after ratification by Cape Verde, which took place on 23 June. The package requires Cape Verde to adapt some of its economic regulation. In particular, it will need to introduce a new Customs Code, and to introduce copyright
and patent
laws complying with the Agreement on Trade-Related Aspects of Intellectual Property Rights
. According to the World Intellectual Property Organization
(WIPO), Cape Verde does not have legislation for industrial property, such as patents, trademarks, and industrial designs but does have a law on copyrights (Law No. 101/III/90, December 1990). Pascal Lamy, director-general of the WTO said, "I am very pleased to welcome Cape Verde as a new member. This new membership will strengthen multilateral trading system. Being part of the WTO will enable Cape Verde to continue its integration into the world economy."
Cape Verde
The Republic of Cape Verde is an island country, spanning an archipelago of 10 islands located in the central Atlantic Ocean, 570 kilometres off the coast of Western Africa...
is a small archipelagic
Archipelago
An archipelago , sometimes called an island group, is a chain or cluster of islands. The word archipelago is derived from the Greek ἄρχι- – arkhi- and πέλαγος – pélagos through the Italian arcipelago...
nation that lacks resources and has experienced severe droughts. Agriculture is made difficult by lack of rain and is restricted to only four islands for most of the year. Most of the nation's GDP comes from the service industry. Cape Verde's economy has been steadily growing since the late 1990s, and it is now officially considered a country of average development, being only the second country to have achieved such transition, after Botswana
Botswana
Botswana, officially the Republic of Botswana , is a landlocked country located in Southern Africa. The citizens are referred to as "Batswana" . Formerly the British protectorate of Bechuanaland, Botswana adopted its new name after becoming independent within the Commonwealth on 30 September 1966...
in 1994. Cape Verde has significant cooperation with Portugal at every level of the economy, which has led it to link its currency
Fixed exchange rate
A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.A fixed exchange rate is usually used to...
(the Cape Verdean escudo) first to the Portuguese escudo
Portuguese escudo
The escudo was the currency of Portugal prior to the introduction of the Euro on 1 January 1999 and its removal from circulation on 28 February 2002. The escudo was subdivided into 100 centavos....
and, in 1999, to the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
.
Resources
Cape Verde
The Republic of Cape Verde is an island country, spanning an archipelago of 10 islands located in the central Atlantic Ocean, 570 kilometres off the coast of Western Africa...
's low per capita GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
reflects a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought
Drought
A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...
. During periods of normal rainfall, only 4 of 10 islands (Santiago, Santo Antão, Fogo, and Brava) support significant agricultural production.
About 90% of food must be imported. Cape Verde annually runs a high trade deficit, financed by foreign aid and remittances from emigrants; remittances constitute a supplement to GDP of more than 20%. Economic reforms, launched by the new democratic government in 1991, are aimed at developing the private sector and attracting foreign investment to diversify the economy. Since 1991, the policies the government has pursued include an open welcome to foreign investors and a far-reaching privatization program.
Fish and shellfish are plentiful, and small quantities are exported. Cape Verde has cold storage and freezing facilities as well as fish processing plants in Mindelo
Mindelo
For the parish in Portugal, see Mindelo, PortugalMindelo , is a port city in the northern part of the island of São Vicente in Cape Verde. Mindelo is also the seat of the parish of Nossa Senhora da Luz, and this island's municipality...
, Praia
Praia
Praia , is the capital and largest city of Cape Verde, an island nation in the Atlantic Ocean west of Senegal. It lies on the southern coast of Santiago island in the Sotavento Islands group. It is the island's ferry port and is home to one of the nation’s four international airports...
, and on Sal
Sal, Cape Verde
Sal is an island in Cape Verde. It belongs to the northern group of islands, called Barlavento. The island is composed by a single administrative division, the Sal municipality. The island is home to Amílcar Cabral International Airport, the main airport of Cape Verde.- Geography :The island is...
. However, the fishing potential, mostly lobster
Lobster
Clawed lobsters comprise a family of large marine crustaceans. Highly prized as seafood, lobsters are economically important, and are often one of the most profitable commodities in coastal areas they populate.Though several groups of crustaceans are known as lobsters, the clawed lobsters are most...
and tuna
Tuna
Tuna is a salt water fish from the family Scombridae, mostly in the genus Thunnus. Tuna are fast swimmers, and some species are capable of speeds of . Unlike most fish, which have white flesh, the muscle tissue of tuna ranges from pink to dark red. The red coloration derives from myoglobin, an...
, is not fully exploited.
The economy is service-oriented, with commerce, transport, and public services accounting for almost 70% of GDP. Although nearly 38% of the population lives in rural areas, the share of agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
in GDP in 2010 was only 9.2% (up from 8.9% in 1995); of the 1998 total, fishing
Fishing
Fishing is the activity of trying to catch wild fish. Fish are normally caught in the wild. Techniques for catching fish include hand gathering, spearing, netting, angling and trapping....
accounts for 1.5%.
The Cape Verdean government established the top priorities for development as the promotion of a market economy and of the private sector; the development of tourism, light manufacturing industries, and fisheries; and the development of transport, communications, and energy facilities. In 1994-95 Cape Verde received a total of about U.S.$50 million in foreign investments, of which 50% was in industry, 19% in tourism, and 31% in fisheries and services. Prospects for 2000 depend heavily on the maintenance of aid flows, remittances, and the momentum of the government's development program.
Mineral industry
Mining is an insignificant contributor to the country's economy. Most of the country's mineral requirements are imported. As of 2007, production of mineral commodities was limited to clayClay
Clay is a general term including many combinations of one or more clay minerals with traces of metal oxides and organic matter. Geologic clay deposits are mostly composed of phyllosilicate minerals containing variable amounts of water trapped in the mineral structure.- Formation :Clay minerals...
on the islands of Boa Vista
Boa Vista, Cape Verde
Boa Vista is the easternmost island of Cape Verde. It is located in the Barlavento group of the archipelago. The island is known for marine turtles and traditional music, as well as its ultramarathon and its sand dunes and beaches...
, Sal
Sal, Cape Verde
Sal is an island in Cape Verde. It belongs to the northern group of islands, called Barlavento. The island is composed by a single administrative division, the Sal municipality. The island is home to Amílcar Cabral International Airport, the main airport of Cape Verde.- Geography :The island is...
, and São Vicente
São Vicente, Cape Verde
São Vicente , also Son Visent or Son Sent in Cape Verdean Creole, is one of the Barlavento islands of Cape Verde. It is located between the islands of Santo Antão and Santa Luzia, with the Canal de São Vicente separating it from Santo Antão.- Geography :The island is roughly rectangular in shape...
; gypsum
Gypsum
Gypsum is a very soft sulfate mineral composed of calcium sulfate dihydrate, with the chemical formula CaSO4·2H2O. It is found in alabaster, a decorative stone used in Ancient Egypt. It is the second softest mineral on the Mohs Hardness Scale...
on the island of Maio
Maio, Cape Verde
Maio is the easternmost of the Sotavento islands of Cape Verde. Maio is located south of the islands of Boa Vista and east of Santiago. The island is also known for its large forest, which is unusual for Cape Verde.-Geography:The island covers an area of 269 km²...
; limestone
Limestone
Limestone is a sedimentary rock composed largely of the minerals calcite and aragonite, which are different crystal forms of calcium carbonate . Many limestones are composed from skeletal fragments of marine organisms such as coral or foraminifera....
on the islands of Boa Vista, Sal, and Santo Antão; pozzolana
Pozzolana
Pozzolana, also known as pozzolanic ash , is a fine, sandy volcanic ash. Pozzolanic ash was first discovered and dug in Italy, at Pozzuoli. It was later discovered at a number of other sites as well...
on the island of Santo Antão; and salt
Salt evaporation pond
Salt evaporation ponds, also called salterns or salt pans, are shallow artificial ponds designed to produce salts from sea water or other brines. The seawater or brine is fed into large ponds and water is drawn out through natural evaporation which allows the salt to be subsequently harvested...
on the islands of Maio and Sal. Cape Verde was not a natural gas or petroleum producer as of 2007.
Transportation
Cape Verde's strategic location at the crossroads of mid-Atlantic air and sea lanes has been enhanced by significant improvements at Mindelo's harbor (Porto Grande) and at Sal's international airport. Ship repair facilities at Mindelo were opened in 1983, and the harbors at Mindelo and Praia were recently renovated. The major ports are Mindelo and Praia, but all other islands have small port facilities, some of which are to be expanded in the near future. In addition to the international airport on SalAmilcar Cabral International Airport
Amílcar Cabral International Airport , also known as Sal International Airport or Amílcar Cabral Airport, is the principal international airport of Cape Verde. The airport is named after the revolutionary leader Amílcar Cabral....
, airports are located on all of the inhabited islands. The archipelago has 3,050 kilometers (1,830 mi.) of roads, of which 1,010 kilometers (606 mi.) are paved. The new Praia International Airport
Praia International Airport
Praia International Airport is an airport located on Santiago Island in Cape Verde. It was opened in late 2005, replacing the old Francisco Mendes International Airport. It is located about 3 km northeast of central Praia in the southeastern part of the island of Santiago.The first flight to...
is currently operative.
International recognition
Cape Verde is considered a developing country, and is included on the list of the United Nations Small Island Developing StatesSmall Island Developing States
Small Island Developing States are low-lying coastal countries that tend to share similar sustainable development challenges, including small but growing populations, limited resources, remoteness, susceptibility to natural disasters, vulnerability to external shocks, excessive dependence on...
.
In 2007 the United Nations graduated Cape Verde from the category of Least Developed Countries
Least Developed Countries
Least developed country is the name given to a country which, according to the United Nations, exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world...
, only the second time this has happened to a country.
On December 18, 2007, the General Council of the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
approved a package for the accession of Cape Verde to the WTO. Accession was effective on July 23, 2008, 30 days after ratification by Cape Verde, which took place on 23 June. The package requires Cape Verde to adapt some of its economic regulation. In particular, it will need to introduce a new Customs Code, and to introduce copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
and patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
laws complying with the Agreement on Trade-Related Aspects of Intellectual Property Rights
Agreement on Trade-Related Aspects of Intellectual Property Rights
The Agreement on Trade Related Aspects of Intellectual Property Rights is an international agreement administered by the World Trade Organization that sets down minimum standards for many forms of intellectual property regulation as applied to nationals of other WTO Members...
. According to the World Intellectual Property Organization
World Intellectual Property Organization
The World Intellectual Property Organization is one of the 17 specialized agencies of the United Nations. WIPO was created in 1967 "to encourage creative activity, to promote the protection of intellectual property throughout the world"....
(WIPO), Cape Verde does not have legislation for industrial property, such as patents, trademarks, and industrial designs but does have a law on copyrights (Law No. 101/III/90, December 1990). Pascal Lamy, director-general of the WTO said, "I am very pleased to welcome Cape Verde as a new member. This new membership will strengthen multilateral trading system. Being part of the WTO will enable Cape Verde to continue its integration into the world economy."
External links
- World Bank: Cape Verde - Data & Statistics
- Instituto Nacional de Estatística National Institute of Statistics
- Banco de Cabo Verde Central Bank of Cape Verde
- Bolsa de Valores de Cabo Verde Cape Verdean Stock Exchange
- Cape Verde latest trade data on ITC Trade Map